February 21, 2025, Newsletter

Dear Friends,

Tangents: Happy Fri -yeah!

February 21, 1925: New Yorker Magazine debuts.
February 21, 1916: Battle of Verdun in France – over 1 million men killed.
February 21, 1947: Edwin Land demonstrates the first “instant camera” – the Polaroid Land Camera, to the Optical Society of America in New York City, revolutionizing photography by producing a developed photograph in about 60 seconds.
On Feb. 21, 1965, former Black Muslim leader Malcolm X was shot and killed by assassins identified as Black Muslims as he was about to address a rally in New York City; he was 39.   Go to article

Andres Segovia, guitarist, b. 1893.
Anais Nin, writer, b.1903.
W.H. Auden, poet/writer, b. 1907.

Decapitated woman found in Irish bog is 2,000-year-old ritual sacrifice
A bog body discovered in Northern Ireland is actually a young woman, not a teenage boy as previously thought. Read More

Evolution itself can evolve, new study argues
A new computer model suggests that the process of evolution can get better at evolving in the face of environmental change. Read More.

Scientists may have just discovered 300 of the rarest black holes in the universe
How black holes grow to monstrous scales is one of astronomy’s prevailing enigmas. A new record-breaking dataset, which reveals 300 potential ‘missing link black holes’, could help to unravel it. Read More.

AI-designed chips are so weird that ‘humans cannot really understand them’ — but they perform better than anything we’ve created
AI models have, within hours, created more efficient wireless chips through deep learning, but it is unclear how their ‘randomly shaped’ designs were produced. Read More.

Stunning images from the Underwater Photographer of the Year contest
Fighting fish, thirsty camels and hairy shrimp are all featured among the winning images of the Underwater Photographer of the Year competition.

A survival tale
In this short video, a 24-year-old kayaker described what happened when he was briefly swallowed by a humpback whale.

USA vs. Canada
Canada’s men’s hockey team beat Team USA in an overtime thriller Thursday to win the inaugural 4 Nations Face-off championship.

Can shoes be art?
Germany’s Federal Court of Justice is wrestling whether or knot a popular shoe can be considered art.
PHOTOS OF THE DAY

Nuuk, Greenland
Children play hockey on an icy surface in the Danish territory’s capital city
Photograph: Emilio Morenatti/AP

Tundra swans, whose natural habitat is the Arctic region, flock to Lake Gala to spend the winter season in Edirne, Turkey
Photograph: Anadolu/Getty

New Delhi, India
Participants drive a 1947 Buick vintage car around India Gate during the ‘21 Gun Salute Concours d’Elegance’
Photograph: Arun Sankar/AFP/Getty Images
Market Closes for February 21, 2025

International Markets

Bonds

Currencies

Commodities

Market Commentary:
There is one thing stronger than all the armies in the world, and this is an idea whose time has come. –Victor Hugo, 1802-1885.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite fell for the third day, dropping 1.4%, or 367.05 to 25,147.03 in Toronto.
The move was the biggest since falling 2.2% on Dec. 18.
Today, information technology stocks led the market lower, as 8 of 11 sectors lost; 170 of 220 shares fell, while 48 rose.
Shopify Inc. contributed the most to the index decline, decreasing 6.0%.
Ivanhoe Mines Ltd. had the largest drop, falling 11.3%.
Insights
* In the past year, the index had a similar or greater loss four times. The next day, it declined three times for an average 1.3% and advanced 0.8% once
* This month, the index fell 1.5%
* So far this week, the index fell 1.3%, heading for the biggest decline since the week ended Dec. 20
* The index advanced 19% in the past 52 weeks. The MSCI AC Americas Index gained 20% in the same period
* The S&P/TSX Composite is 2.8% below its 52-week high on Jan. 30, 2025 and 19.2% above its low on Feb. 21, 2024
* S&P/TSX Composite is trading at a price-to-earnings ratio of 20.9 on a trailing basis and 18.7 times estimated earnings of its members for the coming year
* The index’s dividend yield is 2.8% on a trailing 12-month basis
* S&P/TSX Composite’s members have a total market capitalization of C$4.12t
* 30-day price volatility rose to 11.38% compared with 11.12% in the previous session and the average of 11.15% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Information Technology| -113.4086| -4.0| 0/10
Materials | -99.0378| -3.1| 4/45
Financials | -72.2210| -0.9| 7/18
Energy | -64.4987| -1.5| 5/38
Industrials | -16.4378| -0.5| 6/22
Consumer Discretionary| -8.6039| -1.1| 3/8
Consumer Staples | -4.1078| -0.4| 5/5
Real Estate | -2.4860| -0.5| 4/15
Health Care | 0.4446| 0.6| 2/2
Utilities | 4.0500| 0.4| 9/5
Communication Services| 9.2575| 1.5| 3/2
================================================================
| | |Volume VS| YTD
|Index Points | | 20D AVG | Change
Top Contributors | Move | % Change | (%) | (%)
================================================================
Shopify | -89.2000| -6.0| 1.3| 7.5
Manulife Financial | -24.3200| -4.4| -11.9| -2.3
Brookfield Corp | -13.2700| -1.6| 27.1| 1.3
Canadian National | 2.7930| 0.5| -27.1| 1.3
Telus | 3.8700| 1.7| 20.2| 13.9
BCE | 4.4130| 2.1| -9.1| 2.3
US
By Rita Nazareth, Vildana Hajric and Emily Graffeo
(Bloomberg) — Stocks got hit after weaker-than-expected economic data raised concern about the outlook for Corporate America amid a surge in consumers’ long-run inflation views to the highest since 1995.
From consumer sentiment to housing and services, Friday’s readings unsettled investors at a time when the Federal Reserve is in no rush to cut rates.
The S&P 500 lost over 1.5% and bonds rallied.
A notional $2.7 trillion of options tied to equities and ETFs was expected to expire.
That usually amplifies price swings.
Also contributing to the volatility was a rally in Covid-19 vaccine makers as traders shared earlier reports about a new coronavirus study in China.
$2.7 Trillion Option Expiry to ‘Unclench’ Gamma: Equity Insight
To Keith Lerner at Truist Advisory Services, you put all those factors together when you have a stock market that’s so “richly valued”, and it’s enough for “a little bit of a shakeout.”
At AlphaSimplex Group, Katy Kaminski says it just seems to be a “classic risk-off type of day.”
“Is this the start of the correction?” said Andrew Brenner at NatAlliance Securities.
“Fears of a weaker economic outlook is dwarfing higher inflation. Add in three people have sent us a new bat virus story. Does anyone want to go into the weekend short Treasuries?”
The S&P 500 fell 1.7%.
The Nasdaq 100 slid 2.1%.
The Dow Jones Industrial Average slipped 1.7%, led by a plunge in UnitedHealth Group Inc.
The Dow transportation index sank 2.6%.
The Russell 2000 dropped 2.9%. A gauge of the Magnificent Seven mega caps lost 2.5%.
A late rally in the Treasury market pushed the yield on 10-year notes lower for a sixth-straight week as traders hunt for safety amid lower stock and oil prices.
The yield on 10-year bonds fell eight basis points to 4.43%.
A dollar gauge rose 0.2%.
“With policy uncertainty and weaker retail sales guidance yesterday from consumer spending bellwether Walmart, we may have the catalyst we need for a healthy correction,” said Gina Bolvin at Bolvin Wealth Management Group.
“However, there’s still a strong foundation in place for the bull market to continue.”
Bolvin said earnings growth is up, and while the Fed may be on a pause, their next move is a cut.
“A cranky consumer may finally rein in spending which will help ease inflation,” she said.
To Mark Hackett at Nationwide, equity markets remain in a period of consolidation following an impressive two-year run.
“There is an interesting shift in market leadership, which could propel markets forward, as the risk/reward dynamics in the international and value space catch the eye of investors,” Hackett said.
The majority of similar consolidation phases in US equities have ended with a continuation of the bull market, according to Ed Clissold and Thanh Nguyen at Ned Davis Research.
The 1962 cyclical bear is the most notable exception.
In fact, the average pattern suggests additional consolidation before moving higher, they noted.
“Whether the last 2.5 months are a consolidation phase within an ongoing cyclical bull, or the start of a bear market, depends on inflation, earnings, and other factors,” they said.
“Currently, they support the argument that it is a bull market until proven otherwise.”
Meantime, hedge funds have trimmed net positions on most of the Magnificent Seven stocks, according to Goldman Sachs Group Inc. strategists.
“The latest filings show hedge funds becoming more selective within popular sectors and themes,” the team including Ben Snider and Jenny Ma wrote.
Despite the trimming, six companies in the group of mega caps still rank among top positions for hedge funds, with the exception being Tesla Inc.
More broadly, short interest for the median S&P 500 stock has also increased to the highest level since 2020, now at 2% of market cap.
European equities attracted the biggest inflows since the war in Ukraine began three years ago, according to a note from Bank of America Corp., underpinned by once-strong optimism around peace negotiations.
About $4 billion flowed into regional funds in the week through Feb. 19, the most since February 2022, the note said citing EPFR Global data.
It also marked a second consecutive week of inflows into Europe.
BofA strategist Michael Hartnett reiterated a preference for global stocks to US peers, saying markets such as Germany, China, Japan and South Korea are more attractive at a time when business activity is improving.
Meanwhile, he warned American markets face a risk from an unexpected slowdown in economic growth.

Corporate Highlights:
* The US Justice Department has been investigating UnitedHealth Group Inc.’s Medicare billing practices, a person familiar with the matter said.
* Coinbase Global Inc. said the Securities and Exchange Commission has agreed to drop its lawsuit that accused the largest US cryptocurrency trading platform of running an illegal exchange. The agreement is pending commissioner approval.
* President Donald Trump told a gathering of governors that Apple Inc. CEO Tim Cook promised him that the company’s manufacturing would shift from Mexico to the US during a meeting at the White House this week.
* B. Riley Financial Inc. jumped after the investment and brokerage firm said it has enough cash for the next 12 months, as it continues to navigate a slew of soured investments and cope with upcoming debt payments.
* US prosecutors and regulators are investigating a $32 million deal between CrowdStrike Holdings Inc. and a technology distributor to provide cybersecurity tools to the Internal Revenue Service, according to two people familiar with the matter and a document seen by Bloomberg News.
* Akamai Technologies Inc. tumbled after the infrastructure software company gave an outlook that was weaker than expected.
* Block Inc. plunged after the digital-payments company posted fourth-quarter profit and revenue that fell short of analysts’ forecasts.
* Booking Holdings Inc., the parent to travel brands such as Kayak and Priceline, delivered better-than-expected fourth- quarter results following a bustling holiday season.
* Rivian Automotive Inc. tumbled after warning it’s poised for a first-ever decline in electric-vehicle deliveries in 2025, heralding a new challenge after the company achieved a long-held profitability goal.

Some of the main moves in markets:
Stocks
* The S&P 500 fell 1.7% as of 4 p.m. New York time
* The Nasdaq 100 fell 2.1%
* The Dow Jones Industrial Average fell 1.7%
* The MSCI World Index fell 1.3%
* Dow Jones Transportation Average fell 2.6%
* The Russell 2000 Index fell 2.9%
* Bloomberg Magnificent 7 Total Return Index fell 2.5%
Currencies
* The Bloomberg Dollar Spot Index rose 0.2%
* The euro fell 0.4% to $1.0461
* The British pound fell 0.3% to $1.2631
* The Japanese yen rose 0.3% to 149.14 per dollar
Cryptocurrencies
* Bitcoin fell 3.2% to $95,032.25
* Ether fell 3.3% to $2,637.31
Bonds
* The yield on 10-year Treasuries declined eight basis points to 4.43%
* Germany’s 10-year yield declined six basis points to 2.47%
* Britain’s 10-year yield declined four basis points to 4.57%
Commodities
* West Texas Intermediate crude fell 3.1% to $70.25 a barrel
* Spot gold fell 0.1% to $2,934.71 an ounce

–With assistance from Rheaa Rao, Sujata Rao, Macarena Muñoz, Anand Krishnamoorthy and Divya Patil.
Have a wonderful weekend everyone.

Be magnificent!
As ever,

Carolann
The longer you can look back, the farther you can look forward. –Winston Churchill, 1874-1965.

Carolann Steinhoff, B.Sc., CFP®, CIM, CIWM
Senior Investment Advisor

Queensbury Securities Inc.,
St. Andrew’s Square,
Suite 340A, 730 View St.,
Victoria, B.C. V8W 3Y7

Tel: 778.430.5808
(C): 250.881.0801 (Text Only)
Toll Free: 1.877.430.5895
Fax: 778.430.5828
www.carolannsteinhoff.com